Sports Betting Ad Spend Booming, but How Much is Too Much?

• The Sports Betting and Gaming Industry Spent $488 million on Advertising in One Year
• Sportsbooks Must Balance Ad Spending Against Potential Profits
• As More States Legalize Sports Betting, Expect More Ads to Follow

The Sports Betting and Gaming Industry Spent $488 million on Advertising in One Year

As humorous as JB Smoove and the Manning brothers are on TV, sports betting ads in all forms have been appearing more frequently now that it’s legal to wager on games all over the U.S., and, according to Media Radar. it has become almost a half a billion-dollar annual market.

Fans of pro and college teams enjoy watching games and some want to place wagers on the results, and of course, it is important for each sportsbook to attract those potential customers to their sites, but the massive amount of sports betting commercials now playing has been noticed.

Even Ken Fuchs, senior vice president of sports for Caesars Digital and therefore the guy ultimately in charge of the Caesars ads that are played constantly during pro and college games now, agrees that too much of a good thing can be a bad thing, saying:

“You do have to draw lessons from the UK: you have to self-regulate. It’s about how does a customer interacts with Caesars as a brand. It’s not about shouting at people: ‘Free money! Free money! Free money!’ That’s what wears people down.”

With something as new as the US sports betting market, it could take time to find the right balance of sportsbooks ads that consumers will appreciate, a level that Johnny Avello, director of race and sportsbook operations for DraftKings, feels he and his company have achieved, saying:

I was at the (train) terminal in Hoboken yesterday and I saw DraftKings on every kiosk and every wall. And I think it’s effective. It works.

Another critical balance the sportsbook companies are now focused on is between total ad spend and their return on investment.

Sportsbooks Must Balance Ad Spending Against Potential Profits

It’s a tricky balance between how much is spent on sportsbook marketing versus how many active customers it eventually brings in, especially given that the leagues and sports are seasonal and more popular in some geographical markets than in others.

Two major sportsbooks operating legally in the US are FanDuel and DraftKings, whose ads and commercials are becoming recognizable through repetition, and they have each reported the ad spend to revenue balance they found in the first half of the year:

• FanDuel spent $404m on marketing and sales; generated $952m in revenue.
• DraftKings spent $399m on marketing and sales; generated $610m in revenue.

Over time most businesses will find the sweet spot, a recipe that Kyle Christensen, PointsBet’s chief marketing officer, feels his company has already discovered, saying:

We have a philosophy not to spend irrationally but be aggressive and disciplined. It has served us well, made our users happy, and will continue to be our perspective as we look at future advertising budgets.

The more money these ads make, the more of them we should expect to see.

As More States Legalize Sports Betting, Expect More Ads to Follow

The statewide sports betting market in the US has only been legal since mid-2018, so it will continue to grow as more states join in and regulate and tax their own market, and with those new businesses will come more and more commercials and ads.

But unless the sports betting market, in general, wants an outside entity to begin enforcing rules to cut down on the number of ads sports fans must endure, they will begin to self-regulate and find the perfect balance between generating money and becoming annoying.

Otherwise, they also risk wearing their customers down.